NYDfc 


.STATEMENT 


Hq^tMBten,  & 


Washington,  June  30th,  1868. 
To  the  Gentlemen  of  the  House  Public  Land  Committee : 

The  following  on  behalf  of  the  Terminal  Central  Pacific  Railway- 
Company  of  California,  is  respectfully  submitted  : 

STATEMENT. 

The  Terminal  Central  Pacific  Railway  Company  was  organized 
under  the  general  Railroad  law  of  the  State  of  California,  with  the 
object  of  connecting  Vallejo  and  the  terminus  there  of  the  California 
Pacific  Railroad,  with  San  Francisco  by  the  shortest  possible  rail  and 
ferry  communication.  By  the  located  line  of  the  road  that  connec- 
tion embracing  the  ferriages  opposite  San  Francisco  and  across  the 
Straits  of  Carquinez  is  found  to  be  25.5  miles,  which  added  to  the 
59.75  miles  length  of  road  of  the  California  Pacific  Company  will 
make  the  connections  with  Sacramento  85,25  miles  in  length. 

Yerba  Buena  or  Goat  Island  was  the  point  selected  in  the  location 
of  road  of  the  Terminal  Central  Pacific  Railway  as  the  site  for  de- 
pots ;  but  by  a  Report  of  the  U.  S.  Engineers  relating  to  the  com- 
mercial occupation  of  that  Island,  recommendation  was  made  that 
the  whole  Island  be  retained  for  military  purposes,  and  the  represen- 
tatives of  the^Company  immediately  secured  from  the  State  of  Cal- 
ifornia a  grant  of  150  acres  of  the  shoals  north  of  the  Island  for 
their  depot  purposes,  and  now  ask  of  Congress  permission  to  take 
such  material  from  the  Island  as  may  be  relinquished  by  the  War 
Department  for  the  purpose  of  filling  upon  and  reclaiming  that 
shoal  property. 

The  objections  that  have  been  urged  are  as  follows : 

1.  That  the  United  States  may  need  the  shoals  as  part  of  the  Is- 
land defences. 

2.  That  the  Terminal  Central  Pacific  Railway  Co.  have  not  yet 
built  any  road,  and  that  the  desire  to  obtain  this  privilege — appears 
of  a  speculative  character. 

3.  That  the  Company  intend  a  species  of  black  mailing  operations 
against  the  Western  Pacific  Railroad  Company,  and  that  the  cession 


to  the  T.  C.  P.  R.  W.  Co.  of  this  privilege  to  go  upon  and  take 
from  the  Island  rock  material,  will  interfere  with  the  legitimate  de- 
sign of  said  Western  Pacific  Railroad  Company. 

1.  It  is  respectfully  submitted  that  the  whole  question  of  rights 
of  the  Company  holding  those  shoals  depends  upon  the  respective 
powers  and  legal  rights  of  the  State  and  National  Governments. 
By  reference  to  the  following  Supreme  Court  decisions  in  15  Peters, 
pp.  407,-9  Howard,  p.  471,-9  Wheaton,  p.  203,-7  Howard,  p. 
185, — 16  Peters,  p.  234, — and  particularly  3  Howard,  p.  212,  Pol- 
lards lessee  vs.  Hagan, — it  will  be  seen  that  the  right  of  the  State  to 
jurisdiction  over  the  submerged  lands  within  her  borders  is  definite- 
ly settled.  The  right  of  disposal  existing,  carries  with  it  the  right 
to  erect  such  structures  as  the  owners  may  choose,  but  in  time  of 
war  or  threatened  war,  the  United  States  can  appropriate  to  its  use 
said  structures  or  property.  The  right  of  condemnation  of  private 
property  over  which  the  United  States  has  had  no  prior  title,  for 
war  or  defensive  purposes,  in  time  of  peace,  is  not  yet  accorded  the 
National  Government.  Such  a  process  would  naturally  be  by  the 
advice  founded  upon  the  mere  opinion  of  the  officers  of  the  Army, 
and  the  commercial  necessities  and  property  of  the  citizens  of  the 
United  States,  have  not  yet  been  made  subservient  to  any  such  opin- 
ions, but  only  in  time  of  actual  war  or  danger  of  war  does  the  popu- 
lar voice  justify  the  Executive  in  taking  possession  of  private  prop- 
erty for  National  defensive  purposes.  While  holding  this  war  power 
over  the  shoals  in  question,  the  United  States  can  have  no  legal 
voice  in  their  disposal,  occupation  or  uses  during  time  of  peace. 

The  Company,  in  asking  for  this  material  from  the  Island,  ask  it 
as  rendering  them  indirectly  so  much  financial  aid  ;  should  they  fail 
in  receiving  this  concession,  it  would  not  interfere  with  the  projected 
occupation  of  the  shoals,  but  would  force  them  to  incur  a  million 
dollars  extra  expense  in  their  improvement.  Financially,  too,  it  is 
to  the  benefit  of  the  United  States  that  the  concession  asked  with 
the  accompanying  restrictions,  should  be  granted.  Yerba  Buena 
Island  is  an  unimproved  mountain,  without  battery,  earth-works,  or 
guns,  of  116  acres  area  and  with  its  ridge  342  feet  above  high  water. 
By  reference  to  the  frequent  and  heavy  appropriations  for  harbor 
defences  of  San  Francisco,  it  will  be  seen  that  to  make  this  Island 
in  any  way  effective,  there  is  inevitably  necessary  a  large  amount 


Tin  |?I<A,<Y       rw^ 


3 

of  costly  excavation  and  work.  The  Company,  by  the  provisions 
of  the  bill  pending,  ask  permission  to  reduce  the  hight  of  said  Island, 
to  terrace  its  slopes,  to  scarp  its  sides  and  bluffs,  or  in  any  other 
way — that  is  the  plan  of  the  Chief  Engineer — do  the  work  of  pre- 
paring the  Island  for  proper  defensive  uses  in  which  material  is  to 
be  excavated  and  removed.  To  remove  that  rock  will  cost  either 
the  Company  or  the  United  States  at  least  75  cents  per  yard  cubic, 
and  the  Company  need  for  their  purposes  about  two  and  a  half  mil- 
lions cubic  yards.  The  provisions  of  the  bill  permit  them  to  take 
this  amount  or  less  should  the  Engineer's  plans  so  dictate,  but 
should  the  plans  for  the  defensive  improvement  of  that  Island  de- 
velop the  fact  that  the  removal  of  that  amount  of  material  would 
increase  its  value,  then  its  removal  by  the  Company  will  be  $1,875,- 
000,  value  to  the  United  States,  and  whatever  amount  is  required 
to  be  moved,  will  be  of  proportional  value. 

On  the  other  hand,  while  rendering  a  financial  as  well  as  mili- 
tary service  to  the  United  States,  the  company  save  by  the  per- 
mission to  take  rock  from  a  half  mile  distance  from  its  site  for 
depots,  all  that  would  otherwise  be  expended  in  building  an  ex- 
pensive piling  across  the  water,  their  main  bridge  being  in  con- 
stant commercial  use,  and  hauling  their  rock  from  a  distance  of 
six  miles,  with  all  of  the  extra  contractors  plant,  and  necessary 
wear  and  tear  of  that  plant.  The  State's  right  to  the  disposal  of 
submerged  lands  being  established  by  frequent  decisions  of  the 
Supreme  Court,  and  that  right  being  exercised  in  transferring  to 
the  Terminal  Central  Pacific  Railway  Company  proprietorship 
over  150  acres  of  shoals  north  of  YerbaBuena  Island,  it  is  respect- 
fully submitted  that  the  United  States  has  no  legal  ground  of  ob- 
jection to  the  occupation  and  use  of  said  shoals  for  commercial 
purposes ;  and  further,  that  it  can  have  no  substantial  military 
ground  of  objection,  as  the  shoals  are  such  that  no  enemy's  vessel 
can  ride  over  them,  and  the  heights  of  commercial  structures  and 
buildings  will  be  so  much  lower  than  the  redoubts  on  the  crest  of 
the  Island,  that  all  of  the  surrounding  bay  can  be  effectively  reached 
by  the  guns. 

2.  The  second  objection,  that  the  company  has  not  yet  built 
any  road,  is  in  the  face  of  the  history  of  all  Western  Railroad 
progress  rather  unjust  and  invidious.  Railroads  in  California 
have  to  be  built  from  eastern  or  foreign   capital,  secured  by  bonds 


\)\l\ 


and  mortgage  of  company  franchises  and  stock.  In  asking  this 
capital  to  invest,  any  well  managed  project  must  show  that  every 
precaution  has  been  taken  to  secure  the  most  economical  invest- 
ment of  the  funds  furnished,  in  order  to  preserve  the  legitimate 
value  of  the  company's  bonds.  In  the  subsidized  roads  there  is 
no  guarantee  required  except  that  there  shall  be  built  certain  ac- 
cepted lengths  of  road  upon  which  the  bonds  and  lands  are  issued. 
None  of  the  Government  roads  struck  pick  in  the  ground  until  it 
was  definitively  settled  that  the  United  States  should,  certain  con- 
ditions being  fulfilled,  transfer  values  to  the  company  upon  such 
liberal  terms  as  to  partake  almost  of  the  character  of  a  free  gift. 
The  Central  Pacific  of  California,  the  Western  Pacific  of  Califor- 
nia, the  Union  Pacific,  all  waited  until  Congress  guaranteed  them 
the  funds  with  which  to  build  their  roads;  it  is  respectfully  sub-- 
mitted  whether  the  size  of  the  Corporation  alters  the  principle  in- 
volved !  But  the  required  guarantee  that  this  Terminal  Central 
Pacific  Railway  Company  will  fulfill  its  agreement  with  the  State 
and  the  United  States  is  of  a  stringent  character,  not  equalled  by 
any  of  the  larger  and  more  favored  recipients  of  Government 
bounty.  The  company'  before  being  allowed  to  commence  work, 
must  give  to  the  State  a  bond  for  $250,000  that  it  will  accomplish 
the  improvement  of  those  shoals  and  the  building  of  the  road. 

It  must  expend  within  a  year  at  least  $100,000  on  the  shoal  im- 
provement alone,  and  finally  must  within  four  years  have  built  and 
put  in  running  order  its  entire  road  :  after  this  shall  be  done  the 
company  receive  their  patent  for  the  shoal  property.  To  make  the 
first  working  connection  between  San  Francisco  and  Vallejo  will 
cost  the  company  $2,000,000,  which  must  be  expended  before  they 
obtain  title  to  the  very  ground  upon  which  it  is  fixed  this  material 
from  the  Island  is  to  be  used.  Is  there  any  enterprise  in  the 
United  States  that  is  forced  to  give  such  a  practical  guarantee  that 
it  intends  to  make  bona  fide  use  of  its  granted  privileges  ?  It  is 
true  that  the  company  have  not  built  any  road,  but  against  great 
opposition  they  are  striving  to  place  the  project  upon  such  a  foot- 
ing that  capital  may  safely  be  asked  to  invest  and  build  the  road  ? 
The  company  are  seeking  for  a  natural  and  favorable  birth  into  the 
world  of  finance;  the  opposition  would  make  it  a  profitless  abor- 
tion instead. 

Is  it  speculative  ?     No  amount  of  restrictions  can  prevent   par- 


ties  from  transferring  their  individual  rights  one  to  another,  but  as 
a  company,  the  privileges  from  the  State  are  acquired,  and  as  a 
company,  must  the  recipients  fulfill  their  obligations.  The  shoals 
cannot  be  patented  until  the  Terminal  Central  Pacific  Railway 
Company,  whoever  may  be  its  members,  has  completed  its  road* 
The  public  and  .State  receive  their  full  benefits  as  agreed  upon,  and 
hence  by  the  very  terms  upon  which  the  State  grant  is  made,  it  is 
impossible  that  the  movement  should  be  speculative,  and  that  the 
individuals  engaged  shall  be  made  rich  and  the  State  and  commu- 
nity made  poor. 

3.  The  most  ungenerous  as  well  as  the  most  illogical  and  ground- 
less opposition  is  from  the  representatives  of  the  Western  Pacific 
or  Central  Pacific  Railroad  Company  of  California.  Although 
aware  of  the  enormous  disparity  in  the  forces  engaged  in  a  dispute 
with  the  greatest  prospective  corporation  in  the  United  States,  there 
is  a  principle  to  be  fought  for  which  commands  the  earnest  efforts 
of  every  opponent  of  monopoly  and  extortion,  whether  he  represent 
a  greater  or  smaller  interest — a  principle^!  which  every  friend  of 
a  great  Northern  Railroad,  and  an  equally  important  and  great 
Southern  Railroad,  should  join  hands  to  sustain  ;  effort  must  be 
made  to  force  the  dog  to  come  from  the  manger,  and  permit  other 
new  and  worthy  enterprises  to  at  least  have  an  unprejudiced  op- 
portunity to  seek  Government  aid. 

It  is  respectfully  submitted,  whether  there  can  be  any  black  mail 
in  a  project  that  has  not  the  location  to  extort  from  the  Western 
Pacific  Railroad  Company. 

The  route  of  that  Western  Pacific  Railroad  is  to  San  Jose,  but 
by  private  arrangements,  the  Company  have  received  several  hun- 
dred acres  of  shoal  ground  in  front  of  the  city  of  Oakland,  and 
running  out  to  ship  channel,  for  a  terminus,  and  has  also  received 
from  the  State  of  California  thirty  acres  in  the  city  of  San  Fran- 
cisco, also  for  a  terminus.  The  Company  to  reach  these  two  ter- 
minii,  will  have  to  build  branches  from  their  present  legal  and  sub- 
sidized road.  But  these  branches  will  be  in  entirely  different  di- 
rections from  the  route  of  the  Terminal  Central  Pacific  Railway— 
and  unless  the  owners  of  that  Western  Pacific  Company  are  pre- 
pared to  admit  that  they  have  used  the  wealth  conferred  upon  their 
road  by  the  United  States  for  the  purpose  of  pushing  it  ahead,  in 
buying  up  and  absorbing  local  enterprises,  they  cannot  even  claim  that 


6 

the  Terminal  Road  or  connections  will  compete  with  them.  This 
Western  Pacific  Company  having  such  an  abundant  area  on  both  sides 
of  the  Bay  of  San  Francisco,  granted  them  for  the  express  purpose 
of  making  terminii,  it  is  fair  to  presume,  that  the  Congress  of  the 
United  States  will  not  grant  them  Yerba  Buena  Island  as  the  third 
and  only  remaining  terminal  site,  or  at  least,  not  the  monoply  of  that 
Island,  and  inasmuch  as  the  Company  have  neither  possessory  or  pros- 
pective title  there  to  the  detriment  of  other  roads,  the  question  of 
interference  has  not  even  the  foundation  for  discussion.  The  Ter- 
minal Central  Pacific  Railway  Company  respectfully  pray  that  the 
concession  asked  for  be  granted,  and  that  they  be  thus  enabled  to 
go  before  the  financial  world  with  the  sure  guarantee  that  the  mate- 
rial for  the  reclaimation  of  the  shoals  shall  be  obtained  at  the  mini- 
mum expenditure. 

WM.  B.  HYDE, 
Chief  Engineer  and  Representative  Terminal  Central  Pacific 

Railway  Company. 


*r 


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